Create a custom practice set
Pick category, difficulty, number of questions, and time limit. Start instantly with your own quiz.
Generate QuizGK Question
Under Article 243-I and 243-Y, Finance Commission recommendations include grants-in-aid to Panchayats and Municipalities from State Consolidated Fund. Which criterion is NOT typically used for determining these grants?
- Population
- Area
- Political affiliation of local body representatives
- Fiscal capacity of local bodies
Answer: Political affiliation of local body representatives
Local body grants criteria: (a) Constitutional basis: Article 243-I (Panchayats), 243-Y (Municipalities) require State Finance Commission to recommend grants-in-aid to local bodies from State Consolidated Fund, (b) Typical criteria: (i) Population: Larger populations need more resources for service delivery, (ii) Area: Larger geographical area increases infrastructure, service delivery costs, (iii) Fiscal capacity: Local bodies with low own revenue need more support, (iv) Performance: Incentives for better governance, service delivery, (v) Backwardness: Additional support for disadvantaged regions, communities, (c) NOT criterion: Political affiliation of local body representatives - grants based on objective, needs-based criteria, not political considerations, (d) Applications: (i) State Finance Commissions: Recommend grants based on population, area, fiscal capacity, performance, (ii) Implementation: State governments allocate grants to local bodies per SFC recommendations, (iii) Monitoring: Ensuring grants used for intended purposes, accountability for expenditure, (e) Illustrates fiscal federalism: Grants-in-aid enable local bodies to fulfill constitutional functions; objective criteria ensure equitable, efficient resource distribution, insulating allocation from political bias.